Banking royal commission: NAB bosses Thorburn and Henry dig in, saying ‘we’ll fix culture’

National Australia Bank chief ­Andrew Thorburn has vowed to stay in his role and revisit the bank’s plan to fix its culture.

NAB chief executive Andrew Thorburn arrives at his Melbourne home yesterday. Picture: Aaron Francis

National Australia Bank chief ­Andrew Thorburn has vowed to stay in his role and revisit the ­embattled bank’s plan to fix its culture, despite harsh royal commission criticism and growing concerns among shareholders over accountability.

Mr Thorburn and NAB chairman Ken Henry bunkered down in their respective positions yesterday, as sources said the under-pressure board would convene for a second day of meetings.

After cancelling his leave, which was meant to extend for the rest of February, Mr Thorburn told The Australian he wouldn’t “start again” on NAB’s plans to improve culture and governance, but he would review and revise the strategy.

“We have two clear plans that I need to review, then personally lead,” he said, noting part of that would be rethinking measures on staff and executive accountability for mistakes and failures. “That’s something I need to reflect on.”

Despite the cloud over NAB’s top management, bank stocks posted their biggest one-day gain since the global financial crisis hit a decade ago.

The Hayne report, while taking a tough view on regulation and culture, didn’t propose radical changes to the banking and wealth industry’s structure.

Deutsche Bank analyst Matthew Wilson said the 76 Hayne recommendations, which have been largely adopted by Josh Frydenberg, were “nothing radical”.

“Indeed it’s quite practical but some may say too docile,” Mr Wilson said.

Even so, Mr Thorburn and Dr Henry were singled out in the Hayne royal commission’s historic final report for scathing personal criticism.

Mr Hayne threw NAB and those at the helm into the spotlight for not accepting “necessary responsibility” for misconduct, including charging fees for no service, and not acting in the best interest of superannuation members.

In his report, Mr Hayne said he feared there may be a “wide gap” between the public face of the bank and what it does in practice.

“I was not persuaded that NAB is willing to accept the necessary responsibility for deciding, for itself, what is the right thing to do, and then having its staff act accordingly,” he said.

Dr Henry also held his ground yesterday, saying NAB had welcomed the royal commission challenging of its conduct.

“In his final report, commissioner Hayne said I seemed unwilling to accept criticism of how the board had dealt with some of the issues raised by the commission. I am disappointed that the commissioner formed this view. I know that it is not so,” he said. “The board and I have reflected deeply on those and other ­issues and, as I have said previously, we take them very seriously.”

Mr Thorburn said he agreed what Mr Hayne identified was a gap the bank “needed to close” but he disagreed on other points, including accepting responsibility.

NAB’s plans for change include a culture reform document submitted to the board in December and 26 issues identified in its self-assessment report submitted to the banking regulator, and made public last year.

Shareholders, however, are calling for changes at NAB to ­address the cultural problems and the Hayne report’s rebuke.

“The fact that it (royal commission rebuke) has happened says it all,” said Geoff Driver, business development manager of Australian Foundation Investment Company, a NAB shareholder. “We know they are aware of what’s happening and what needs to change.”

Others see personnel change as bound to occur over weeks and months. One NAB investor, who declined to be named, said: “It looks to me that they are positioning for Henry to go.

“They could both go, then the most likely successor would be (non-executive director and banking executive) Phil Chronican and that would be very positive.”

At least one large shareholder canvassed by The Australian said it was weighing its NAB options, including raising issues of royal commission accountability and culture problems with the board.

Another shareholder, speaking on the basis of anonymity, said the royal commission’s harsh criticism of NAB, Mr Thorburn and Dr Henry made it a “tricky situation” to survive.

“There are questions of ­accountability but it is not quite as severe as the general reaction.”

Shaw and Partners senior analyst Brett Le Mesurier said he expected Mr Thorburn would exit NAB this month, while Dr Henry might retire later in the year. “He (Mr Hayne) was quite sure that NAB’s chair and CEO stood apart from the other major banks, but not in a good way,” he said.

Mr Thorburn defended his unusual decision to take extended leave from the bank, saying it was necessary to take care of his own mental and physical health. “It (long service leave) should be something that can happen and should happen. It’s demanding. I have a life outside the company. I’ve got a marriage, I’ve got children, I’ve got elderly parents. They are the people I want to spend some time with,” he said in an interview on Sky News Australia.